Poverty Reduction in India

International Estimates

As per conventional norms, poverty measurement was confined to measuring the purchasing
power of households as identified by income. They consisted of indices including National
Headcount ratio which gave the percentage of people living below the national poverty line.
Poverty Gap ratio provided the ratio where the mean income of the poor fell under the
poverty line. The Foster-Greer-Thorbecke (FGT) index was widely applied measure based on
normalised poverty gaps.

With time, these measures have been supplemented with multidimensional aspects of poverty
as done by United Nations Development Programme (UNDP) and Oxford Poverty and
Human Development Initiative (OPHI). The Multidimensional Poverty Index (MPI)
measures the acute deprivation faced by people across three dimensions of Education, Health
and Living Conditions. The MPI is calculated for 104 countries covering 5.2 billion people.

Source: https://www.ophi.org.uk/wp-content/uploads/MPI_One_Page_final_updated.pdf

Multidimensional Poverty Index (MPI) for India

MPI measures the share of people who are poor and the degree to which they are poor. MPI
=H*A. (H), the proportion of people who have multidimensionality poverty and average
intensity of poverty (A) the average proportion of dimension for the poor population who are
deprived. As per the UNDP 2022 report, for India, 415 million people exited poverty during
the 15 years before the pandemic. The key aggregates of Headcount ratio and Intensity of
Poverty has fallen significantly for the period 2005-06 to 2019-20, with an MPI reduction of
more than 75 per cent for the period. The most vulnerable segments including rural areas with
the most poor people, children, poorest states and poorest caste and religion groups saw the
fastest reduction in poverty.

National Estimates

Niti Aayog has prepared the National Multidimensional Poverty Index (MPI): A Progress
Review 2023.It provides multidimensional poverty figures across 36 Indian States & Union
Territories across 707 administrative districts for 12 indicators of the national MPI. Data from
National Family Health Survey 5th round conducted in 2019 has been used for calculating
data. Same methodology has been used as in the baseline report. As per the report:

• 13.5 crore people exited multidimensional poverty for the period 2015-16 and 2019-
21.
• India witnessed a steep decline in Poverty Head Count Ratio from 24.85 per cent in
2015-16 to 14.96 per cent in 2019-20.
• India is on track with regard to SDG Target 1.2 of reducing multi dimensional poverty
by at least half by 2030 and is ahead of this timeline.
• Improvement in all 12 indicators highlighting success of Government initiatives and
interventions
• UP, Bihar, MP, Odisha and Rajasthan had steepest fall in number of MPI poor

Source: https://niti.gov.in/sites/default/files/2023-08/India-National-Multidimentional-Poverty-Index-2023.pdf
Rise in Government’s Social Sector Expenditure

The Government’s Social Sector Expenditure has been rising over the years. Social sector
includes public health, nutrition, education, urban development, family welfare, water supply,
sanitation, housing, development of SCs, STs, Social security, welfare, relief measures during
natural calamities. Focus on 112 aspirational districts across 28 states has led to improvement
across health, education, agriculture, basic infrastructure and financial inclusion. Consistent
implementation having strong interlinkages across a diverse set of programmes and initiatives
has been significant in reducing multi dimensional deprivations for citizens.
Social Sector Expenditure by Government (Centre and States)

Achievements of Government Schemes:

• Swachch Bharat Mission (SBM): 2.19 lakh Community Sanitary Complexes (CSCs)
have been constructed across States/UTs of India as part of Swachch Bharat Mission
Grameen as on Dec 2022
• Jal Jeevan Mission (JJM): Tap Water Connections to 10.8 Crore Rural Households
as on Dec 2022
• Poshan Abhiyaan: Poshan Abhiyaan has been successful in focussing on better
nutrition outcomes for the first 1,000 days. Poshan Abhiyaan has led to a nation-wide
revolution in awareness creation regarding nutrition behaviour change for better
feeding and health care practices.
• Samagra Shiksha: Has led to better school infrastructure and improving access and
quality of education
• Pradhan Mantri Ujjwala Yojana (PMUY): LPG coverage has improved to 104.1
per cent in 2022 in comparison to 62 per cent in 2016
 • Pradhan Mantri Jan Dhan Yojana (PMJDY): 50 crore beneficiaries since
inception of PMJDY
• Pradhan Mantri Awas Yojana (PMAY): 64 lakh houses completed under Pradhan
Mantri Awas Yojana- Urban

References

https://www.ey.com/en_in/tax/economy-watch/india-taking-giant-strides-in-meeting-sdg-
target-on-poverty

https://databank.worldbank.org/metadataglossary/millennium-development-
goals/series/SI.POV.NAHC

https://data.oecd.org/inequality/poverty-
gap.htm#:~:text=The%20poverty%20gap%20is%20the,income%20of%20the%20total%20po
pulation.

https://www.ophi.org.uk/wp-content/uploads/MPI_One_Page_final_updated.pdf

https://hdr.undp.org/system/files/documents/hdp-document/2022mpireportenpdf.pdf

https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1940125

https://niti.gov.in/sites/default/files/2023-08/India-National-Multidimentional-Poverty-Index-
2023.pdf

http://103.210.73.67/about

https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1885711

https://pib.gov.in/PressReleasePage.aspx?PRID=1886953

https://pib.gov.in/PressReleasePage.aspx?PRID=1897354#:~:text=Poshan%20Abhiyaan%20
demonstrated%20that%20the,scale%20health%20and%20nutrition%20programmes.

https://pib.gov.in/PressReleasePage.aspx?PRID=1847872

https://static.pib.gov.in/WriteReadData/specificdocs/documents/2022/apr/doc202242447301.
pdf

https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1952793

https://www.pib.gov.in/PressReleasePage.aspx?PRID=1889773